Correlation Between Media Nusantara and Mnc Investama

Can any of the company-specific risk be diversified away by investing in both Media Nusantara and Mnc Investama at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Media Nusantara and Mnc Investama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Media Nusantara Citra and Mnc Investama Tbk, you can compare the effects of market volatilities on Media Nusantara and Mnc Investama and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Media Nusantara with a short position of Mnc Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Nusantara and Mnc Investama.

Diversification Opportunities for Media Nusantara and Mnc Investama

0.66

Correlation Coefficient

Media Nusantara  Mnc Investama

Poor diversification

The 3 months correlation between Media and Mnc is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Media Nusantara Citra and Mnc Investama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Investama Tbk and Media Nusantara is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Media Nusantara Citra are associated (or correlated) with Mnc Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Investama Tbk has no effect on the direction of Media Nusantara i.e., Media Nusantara and Mnc Investama go up and down completely randomly.

Pair Corralation between Media Nusantara and Mnc Investama

Assuming the 90 days trading horizon Media Nusantara Citra is expected to under-perform the Mnc Investama. But the stock apears to be less risky and, when comparing its historical volatility, Media Nusantara Citra is 1.06 times less risky than Mnc Investama. The stock trades about -0.06 of its potential returns per unit of risk. The Mnc Investama Tbk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,800  in Mnc Investama Tbk on September 3, 2024 and sell it today you would lose (2,000) from holding Mnc Investama Tbk or give up 34.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Media Nusantara Citra  vs.  Mnc Investama Tbk

Media Nusantara Citra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media Nusantara Citra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Mnc Investama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mnc Investama Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Media Nusantara and Mnc Investama

The main advantage of trading using opposite Media Nusantara and Mnc Investama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Nusantara position performs unexpectedly, Mnc Investama can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mnc Investama will offset losses from the drop in Mnc Investama's long position.

The idea behind Media Nusantara Citra and Mnc Investama Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.